A manufacturing company produces several semi-finished products (A, B, C and D) that are integrated in the final products. Due to the high customization requirements, it is not possible to keep the semi-finished goods on stock, which means that the demanded parts have to be produced every week. To do so, four machines are available and each machine is dedicated to exactly one product. The machines are generally available for 40 hours per week because they require labour to be run. Each additional hour on one of the machines (overtime) costs 40.

The company knows from experience that demand for each of the semi-finished products is either low, medium, or high in each week. The probabilities are equally distributed ( one third for each scenario) and the amount of required products stays the same for each scenario (due to how they are implemented in the final products).

The following table gives more information:

Semi finished products	Production Time (hours)	Demand (low)	Demand (medium)	Demand (high)
A	2	16	20	24
B	4	8	10	12
C	8	4	5	6
D	1	32	40	48

Sometimes it happens that some machines require overtime while others are idle (but the labour still has to be paid for 40 hours). It is possible to upgrade machines so that they can produce more than one semi-finished product, but this costs 3,000 per machine per additional semi-finished product.

1- Calculate the expected overtime costs for the current, dedicated system

2- Calculate the weekly savings if you implement a 2-flexibility-system. Is it worth to invest?

3- How does the 2-flexibility-system perform in comparison to total flexibility?